Foodpanda India lays off more than 300 of its employees

The layoffs, which constitute about 15% of the company’s overall workforce in the country, will affect about 330 Foodpanda India employees.Biswarup Gooptu | ET Bureau | December 30, 2015, 06:38 IST

Foodpanda India, the local unit of Rocket Internet-backed online food ordering venture Foodpanda, has laid off more than 300 of its employees, at a time when it continues to face increased competition from Zomato and other emerging nimbler startups.

The layoffs, which constitute about 15% of the company’s overall workforce in the country, will affect about 330 Foodpanda India employees, given that the company had an employee strength of about 2,200 prior to the reductions.

“While we continued to invest in processes and technology we also had to take some difficult decisions but we believe them to be necessary steps on our path to become sustainable and profitable within the targeted timeline,” Saurabh Kochhar, chief executive of Foodpanda India said in a press release.

The layoffs are taking place in the Indian unit of Foodpanda only, which claims to offer menus from over 12,000 restaurants, spread across over 200 cities in the country, Kochhar told ET separately.

“Re-organization of the business was done across every aspect, from technology to processes to customer service,” Kochhar said in an email response to an ET questionnaire, adding that there were no further layoffs planned in the immediate future.

“At present we do not have any such plans, as we continue to grow at a rapid speed and we believe the year 2016 is going be a great year for our business. We are focused on building scalable revenues and capabilities with a long-term goal,” Kochhar said.

According to the official company statement, the decision to lay off employees was taken after it achieved “about 98% automation rate in order processing,” helped by a combination of “stronger processes and controls to make operations more efficient.”

The announcement comes a little over five months after ET reported that Rohit Chadda, a now former managing director of the venture, was stepping down from the day-to-day responsibilities of running the company.

Later media reports have also stated that Chadda, who was also given the designation of co-founder at Foodpanda, had left under a cloud, having being replaced by Kochhar, who took over the reins in March, earlier this year. Prior to taking over the reins at Foodpanda, Kochhar was the India chief executive of personalised printing startup Printvenue.

Foodpanda, which is active in more than 30 countries globally, faces increasing competition in India’s piping hot food-ordering and delivery industry, which is pegged at nearly Rs 95,000 crore, according to industry reports.

Online restaurant search firm Zomato has also entered the food-ordering market, which has seen the entry of startups, such as TinyOwl and Swiggy.

Foodpanda is part of the Global Online Takeaway Delivery group created earlier this year by Rocket Internet, and counts Goldman Sachs as an investor. Globally, the company has raised $310 million since its inception in 2012, with Rocket holding a majority stake.

There has also been ongoing speculation that Berlin-based incubator and investor was strongly considering putting up a number of its top ventures in India on the block. The company, however, has declined to comment on the same. Earlier in December, media reports also stated that Foodpanda had shut down its operations in Vietnam.